An independent opinion on the financial terms of the transaction, required in case of public tender offers and other significant transactions.
Fairness Opinion, an independent opinion on the financial terms of the transaction.
KPMG is the number one issuer of Fairness Opinions in Poland. Management and Supervisory Boards of corporations (especially those listed on stock exchanges) are constantly facing pressure from shareholders, regulators and control authorities. The risk of overpayment for the assets / companies being acquired is particularly high. For the managers, an incorrect or negligent decision may result not only in the loss of their positions and reputation, but also in severe financial and criminal liability.
Fairness Opinion, an independent opinion on the financial terms of the transaction, is becoming a standard in the Polish market, in particular in the case of large transactions or those affecting minority shareholders, especially in transactions concluded between related entities or those concerning the largest mergers and acquisitions.
Fairness Opinion is recommended in the case of a public tender offer according to Art. 80 of the Act on Public Offering, and in other circumstances requiring the highest standards of corporate governance. In the case of a public tender offer, the act obliges the Management Board to present a position in which it is obliged to declare whether - in their opinion - the price proposed in the tender offer matches the fair value of the company, while the current stock quotations cannot be treated as the only measure of such value.
Since the Management Board may not have sufficient experience to prepare such value estimates or a conflict of interest may occur (the bidder being often the controlling entity, which has appointed the current Management Board), the Management Board may appoint an external expert to issue an opinion. Fairness Opinion constitutes an additional argument supporting the claims of the Management Board that the decisions are made in good faith, according with the interests of the company and its shareholders. Moreover, it is a form of protection against potential future challenging of the strategic decision by shareholders or regulatory authorities.